Scaled advice may help improve Australia's underinsurance problem by increasing traction within the industry more broadly, according to AIA.
The insurance company said that scaled advice, which will come into force as a result of upcoming government reforms, is unlikely to result in a drop in clients reaching out for risk insurance advice.
"There will always be a need for detailed, quality financial advice for a certain segment of the market," AIA Australia's general manager for life insurance, Damien Mu, told InvestorDaily.
"But there are also those who might not need in-depth financial advice who are in need of some help and assistance.
"Given the size of the market and the insurance gap, I don't think [scaled advice] is going to mean that either of those channels will necessarily contract and I think it will mean growth more broadly."
Mr Mu said underinsurance in Australia remains an issue; he has, however, begun to see signs that the situation is improving.
The take-up of direct insurance measures and an increasing number of people obtaining insurance through their superannuation fund has helped, he added.
"I think we've made a significant improvement over the past five to eight years in respect to people having some level of cover," Mr Mu said.
"However, the important area that we need to focus on is how we grow the awareness and the education so that members can elect to take up the level of cover that they need for their individual circumstances.
"That probably is still a journey that we need to go on in terms of getting more people to take up the appropriate level of cover."
